Lilis Energy entered into a five-year, $500 million credit agreement. The credit agreement provides for a senior secured reserve based revolving credit facility with an initial borrowing base of $95 million.
The credit facility matures on October 10, 2023 and is secured by substantially all of the company’s assets. The credit facility is led by BMO Capital Markets and SunTrust Robinson Humphrey as joint lead arrangers; BMO Harris Bank as administrative agent; SunTrust Bank as syndication agent; Capital One as documentation agent and Credit Suisse.
The company also exchanged of approximately $68 million of the existing second lien term debt to equity, in connection with the new credit facility.
Highlights of the transaction include:
- Initial borrowing base of $95 million which can be expanded in the future
- Maximum facility borrowing amount of $500 million
- Proceeds of the new credit facility will be used to repay the company’s existing $50 million first lien term loan, fund future drilling program and for general corporate purposes
- Värde will exchange the approximately $68 million claim amount of its second lien term loan for a combination of preferred and common equity
- Concurrent with the second lien debt conversion, Lilis will issue an additional $25 million tack-on to the existing Series C Preferred equity (same terms as original) to further enhance liquidity and position the company to take advantage of identified accretive acquisition opportunities.
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Ronald D. Ormand, Lilis Energy’s chairman and CEO, said, “These transactions, including the new reserve based credit facility and the exchange of equity, place the company in a position of increased financial strength through reduced leverage and increased liquidity.”
Lilis Energy is a Houston-based independent oil and gas exploration and production company that operates in the Permian’s Delaware Basin.
